Are all Long-Term Care Insurance Policies the Same?
The answer is no. While policies typically share core benefits, they are not all the same. Most insurance agents and financial advisors know very little about designing a policy because the industry and the product features evolve rapidly. Often, they will design a plan which costs much more than what you really need to spend, because they’re not as familiar with how plans are being used at the time of claim.
First, insurance premiums are regulated so no one individual insurance agent can “give you a deal”. You can have three agents quote the same company and, if they are quoting the same benefit, the premium will be the same. Any premium differences will be due to underwriting class (preferred, select, standard, substandard), gender, spousal or partner discounts, the amount of benefit, and “riders” that are added to the policy.
With nearly 20 years of experience and thousands of clients nationwide, a true LTC Insurance Specialist like Mary Ann DeKing will ask you many questions about your health and future or current retirement plans. This is to help you determine the amount of benefit you would need to meet your concerns and budget goals. Then, Mary Ann will shop for the best coverage at the best value. Some insurance agents can only market policies from one insurance company, top Long-Term Care Specialists can usually compare rates from five, six insurers or more. Mary Ann DeKing represents all the major companies in the industry.
Unlike other forms of insurance where you may benefit from changing insurers from one year to another, generally you buy long-term care insurance only once. This is because premiums are based on the AGE and HEALTH you are at the time of your application—so it rarely pays to switch companies. That's why it's important to ask your insurance professional if they can compare coverage from different insurers from the start.
Important riders to consider, and which certainly affect your premium, include inflation options and shared benefit options for spouses/partners.
Many states have partnership plans which provide additional dollar-for-dollar asset protection or “asset disregard”. Specific states have different requirements for inflation options for a policy to be considered a partnership plan.
Short-Term plans have smaller benefits but generally have less conservative underwriting requirements. They will also consider new applicants at older ages.
Single premium asset based or so-called “hybrid” policies (life insurance with riders for long-term care) may have the same premium but the benefit levels will differ. Underwriting will also differ from company to company. Some companies offer annuity based policies with riders for long-term care as well. These generally will have less conservative underwriting.